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James L. Oberstar Headshot

U.S. Senate Must Act to Continue Support for Agency That Creates Jobs

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As the U.S. Senate continues to debate the reauthorization of the Economic Development Administration (EDA), critics are taking to the newspapers and airways to urge defeat of the legislation. It is disheartening to see that the agency I helped create more than 45 years ago, which has had constant bipartisan support, is now under unwarranted partisan attack in an economic environment when the kinds of jobs this agency helps create are needed more than ever. It's particularly troubling when only three years ago the Senate passed EDA's reauthorization unanimously.

The fact is that EDA is the only federal agency with the exclusive mission of creating and retaining American jobs by leveraging private investment in the nation's economically distressed communities and every dollar that the agency invests leverages another $6.90 in private/public investment to create the economic environment for small business to grow and prosper.

What might be even more intriguing to those who are unaware of EDA's effectiveness is that its investments are awarded on a merit-based competitive basis and built on the regional economic development strategies of local officials, private sector leaders and community representatives. This bottom-up approach has allowed EDA to be a strong partner with communities all over the country who are trying to renew their local economies.

In particular, one U.S. Senator from the state of South Carolina has repeatedly supported and praised EDA investments in his home state. And, rightfully so. But, now he's criticizing locally-supported EDA investments to help other states and regions grow their own economies. In 2006, EDA invested $1.5 million in the Horry-Georgetown Technical College Commission of Conway, S.C to build the Regional Healthcare Education Center on the former Myrtle Beach Air Force Base. This healthcare training facility graduates nearly 800 students per year. Since the facility opened three years ago, 90 percent of the Center's students are placed in the health field and 85 percent pass state exams the first time. This economic development investment has helped to diversify the local employment base and develop a critical mass of value-added jobs in the Lowcountry's fast growing healthcare field.

There are similar stories like this all over the country, and certainly in my home state of Minnesota, where local leaders are determining the path toward a stronger economic future. Whether the agency's investments support Washington State's growing wine industry, which currently employs more than 14,000 people and generates more than $3 billion to the state's economy; supporting tourism in the Northern Marianas by building a water tower to serve local tourism-based businesses; or encouraging innovation and entrepreneurship opportunities in Arkansas to grow and create American-owned and American-run businesses -- each of EDA's investments support local and regional economic development priorities.

EDA's investments are generating real returns. In FY 2010, EDA awarded investments that totaled approximately $285 million, which according to its grantees, are expected to help create or retain about 48,500 jobs and generate nearly $6 billion in private investment.

Two major independent third party studies have verified EDA's performance. Based on third-party analysis conducted by Rutgers University in 1997, EDA was found to create jobs at a cost of $3,058 per job, one of the lowest cost-per-job rates in the Federal Government. Grant Thornton updated this analysis in 2008 and the findings were consistent in determining that EDA supports job creation at a marginal cost of between $2,001 and $4,611 in project funding.

One of the major pieces of legislation that I was proud to support when I was in Congress was a 1998 EDA reform bill that enjoyed bipartisan support in both the House and Senate. This legislation was an aggressive step to further improve the agency's efficiency and performance, and additional improvements were enacted in connection with the reauthorization in 2004. That means that the three decade-old GAO reports, which some critics, like the CATO Institute, are improperly leveraging, do not reflect today's reality.

In fact, EDA goes to great lengths to ensure that the agency is a good steward of taxpayer dollars. Recently, EDA called for an Inspector General investigation into irregularities that EDA found in review of several grants. The critics who have pointed to this investigation failed to mention that EDA requested those audits on its own to protect the American taxpayer. These grants represented less than one percent of the grants that EDA awarded in the four years under consideration and the agency has taken pro-active steps to address these concerns, including the termination of some of the awards.

Rather than duplicating the work of other federal agencies, EDA often acts as the catalyst in the federal government's efforts to assist regions and communities in their job creation efforts. This evidence can be seen in recent multi-agency funding opportunities that are providing needed resources to advancing regional industry clusters and ultimately enhancing America's global competitiveness.

Today's EDA solicits bipartisan support for creating higher-skill, higher-wage American jobs. EDA reauthorization is strongly supported by public and private sector groups including business and labor organizations and those representing local government officials. Now is the time to support this critical agency that stimulates the private sector through targeted infrastructure investments needed to keep and grow jobs here in America.

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